JC Penney’s traffic-light layoff system under fire

The chain reportedly asked managers to categorize employees as “green,” “yellow” or “red,” for targeting layoffs. Communication experts say the system is flawed.

By Matt WilsonMarch 7, 2013

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It’s only coming to light now, but in January, JC Penney reportedly instituted a curious policy. The department store chain told supervisors in a companywide broadcast that they should categorize employees by one of three colors.

Green: They’re OK.

Yellow: They need some coaching.

Red: They’re out the door.

Many JC Penney employees aren’t aware of the system, though a store manager who spoke to Business Insider said the company didn’t offer guidance one way or another regarding whether to tell them about it.